Author：Aria
Compile：Azure
Source：GPLP
On the evening of May 13, Tencent Holdings(00700.HK) announced its financial report of the first quarter of 2020, saying that it achieved revenue of 108.065 billion yuan, an increase of 26% year-on-year; profit attributable to equity holders is 28.896 billion yuan, an increase of 6% year-on-year.
Online games and social networks’ value-added services are still the main part of Tencent’s revenue.
In terms of business, Tencent Holdings’ value-added service business revenue increased 27% year-on-year to 62.429 billion yuan. Among them, online game revenue increased 31% year-on-year to 37.298 billion yuan, accounting for 34.51% of total revenue; social network revenue increased 23% year-on-year to 25.131 billion yuan, accounting for 23.26% of total revenue.
Tencent Holdings’ online advertising business increased 32% year-on-year to 17.713 billion yuan; fintech and corporate services revenue increased 22% year-on-year to 26.475 billion yuan.
Tencent Holdings stated that Internet users’ online time in the first quarter has been greatly extended, and users’ active time in games, audio and video terminals, communication and social software for entertainment and enhanced contact has increased significantly.
However, after the effects of public health events fade away, it will take time to test whether the development of Tencent Holdings’ game business will be affected.
At the same time, the growth of Tencent Holdings’ games, Internet services and online education consumption has driven the rise in advertising spending, but advertising expenditures in the FMCG, automotive and travel industries have declined. Tencent Holdings estimates that the advertising industry may face multiple obstacles in the future, including the return of consumers’ internet usage to normal levels, which has led to a decline in the increase in advertising exposure. Multinational brands have significantly reduced their global promotion budgets affected by public health event in the local market.
In addition, due to home quarantine, Tencent Holdings’ fintech services revenue fell compared with the previous quarter, which to some extent dragged down the revenue in the first quarter.
